It is essential to get well-informed legal advice before signing any contracts or legal documents. It is also indispensable when it comes to resolving commercial disputes.

Thailand ranked out 42nd of 133 countries for the efficiency of its legal framework in settling disputes in the World Economic Forum’s 2009-10 Global Competitiveness Report.

• Get general advice on how to build an advisory team in the Export guide.
• Find out more about resolving disputes in the Export guide. 

Thailand has a large number of legal firms. These range from the leading international firms to mid-sized foreign and local firms through to independent business consultants/legal professionals who have lived in Thailand for some time. 

The larger international firms are staffed by both foreign partners and locally engaged Thais and provide the full range of services available by the same international companies in New Zealand. 

Your legal advice must come from a lawyer who has excellent language skills and extensive experience working with foreign companies already in-market. This would almost certainly be a locally based lawyer.

Thailand is one of nine countries on the US Trade Office’s 2009 Priority Watch List. Countries on the Priority Watch List do not provide an adequate level of intellectual property (IP) protection or enforcement, or market access for anyone relying on IP protection.

Deloitte Touche Tohmatsu says overall protection of IP rights in Thailand has improved in recent years thanks to the passage of new laws. Enforcement campaigns have been stepped up though this effort has not been sustained.


• Get general advice on protecting your intellectual property in the Export guide.

In Transparency International’s 2009 corruption perception index, Thailand ranked 84th of 180 countries.

The Thai taxation system raises the revenue from:

• corporate income tax.
• personal income tax.
• value added tax.

Other taxes include excise tax, stamp duty, specific business tax and a petroleum income tax.

There is an extensive withholding tax system in place.

Local governments also levy taxes on land (local development tax) and on land with buildings (house and land tax).

Thailand has treaty agreements to eliminate double taxation with New Zealand.

Corporate taxes

Corporate profits of less than 1 million Baht are taxed at 15 percent, between 1 and 3 million Baht at 25 percent and profits of more than 3 million Baht at 30 percent. 

All companies registered under Thai law are subject to income tax on income earned from sources within and outside Thailand. Foreign companies not registered or not residing in Thailand are subject to tax only on income derived from sources within Thailand.

Taxes imposed on foreign trade transactions include:

• dividends distributed to foreign shareholders are subject to 10 percent withholding tax.
• profits remitted from branches of foreign companies, when repatriated to the head office, are subject to 10 percent tax from the net profit.

Personal taxes

Personal income tax is applied on a graduated scale from 0 percent for net annual income under 150,000 Baht up to 37 percent for net annual income over 4 million Baht. Individuals residing for 180 days or more in Thailand for any calendar year are also subject to income tax on income from foreign sources if that income is brought into Thailand during the same taxable year that they are a resident.

Other taxes

Value added tax (VAT) – Most businesses are required to register for VAT which is generally applied at 7 percent. The exceptions are business operations subject to specific business tax and exempt business operations such as agriculture, sale of newspapers and educational establishments. Exports of goods and services are zero rated.

Excise tax is levied on petroleum and oil products, non-alcoholic beverages, liquor, beer and tobacco, certain air-conditioners, certain light fittings, crystal, passenger cars, yachts and pleasure craft, perfume and cosmetics.
The execution of 28 different types of documents and instruments specified in the Stamp Duty Schedule are subject to stamp duty.

Tax incentives

Incentives vary according to the zone in which a project is located. Three zones have been earmarked as part of the Board of Investment’s efforts to encourage investments in the provincial areas.

Incentives include exemptions or reductions of import duties and business tax and income tax.

Companies must produce annual accounts. Annual statutory returns must be approved by the annual general meeting of the shareholders within four months from the year end and filed with the Ministry of Commerce within one month from approval by the annual general meeting (a maximum of five months from the year end).

Corporate income tax returns and audited accounts should be filed with the Revenue Department within 150 days of the entity's year end.

Bookkeepers must be degree qualified, must also be Thai residents, proficient in the Thai language and be registered with the Federation of Accounting Professional.

Entries may be done in English, but with an appended Thai language translation. Computerised accounting systems should be registered with the Ministry of Commerce and the Revenue Department.

All companies/entities (including representative offices) must be audited by a Thai CPA annually.

Thailand ranked 52nd out of 133 countries for the strength of its auditing and reporting standards in the World Economic Forum’s 2009-10 Global Competitiveness Report.

Payment, quotes and invoices are usually preferred in US dollars or Baht.
Until you get confidence in your Thai business partner, use secured methods of payment such as letters of credit.

Repatriating your profits

Taxes are imposed on foreign trade transactions including:

• dividends distributed to foreign shareholders are subject to 10 percent withholding tax.
• profits remitted from branches of foreign companies, when repatriated to the head office, are subject to 10 percent tax from the net profit.

All foreign exchange transactions are done through authorised banks, with most transactions allowed subject to Exchange Control Act restrictions and Bank of Thailand (BOT)-issued notifications.

Importers can freely draw foreign exchange or purchase foreign exchange to pay for imports. Letters of credit may also be freely opened without authorisation from the Bank of Thailand(BOT). However, they need to obtain an underlying support from any local banks prior to issuing the letter of credit.

There are no restrictions on the remittance of foreign exchange in payment for imported goods. However, the BOT has to be notified of payment remittances exceeding USD 20,000 to other countries or 500,000 baht to Vietnam and neighbouring countries.

Both importers and exporters must obtain a Foreign Transaction Form from a commercial bank, in order to clear goods worth more than USD 20,000 through Customs.

The Bank of Thailand has details on capital and exchange controls.

Thailand has a large number of accounting and legal firms that can assist with due diligence. These range from leading international audit, tax and advisory specialists to private business consultants who have lived in Thailand for some time. 

The New Zealand Thai Chamber of Commerce directory contains contact details of some business consultants who are members of the Chamber. 

Notwithstanding that the Government has made efforts to reduce corruption it remains an ongoing risk for companies operating in Thailand.  An independent government commission (the National Counter Corruption Commission) leads anti-corruption initiatives including efforts to improve transparency in procurement processes and awarding of contracts. 

The legal system does not provide sufficient deterrence against corruption. Unless politically expedient, public officials are seldom successfully convicted of corruption. The media frequently contains allegations of corruption in awarding of public contracts and police involvement in a wide range of illegal activities.


• Get general advice on managing commercial risk including doing due diligence in the Export guide.

• Get general advice on becoming a responsible exporter in the Export guide.

(Additional sources used on this page: RSM Advisory (Thailand), Deloitte Touche Tohmatsu)

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Use of the information is at your own risk and we are not responsible for any adverse consequences arising out of such use. This is a complex area and we recommend that you seek legal advice before taking any related action.